Home builders have lately been on a steady course of constructing ever larger houses and condos for the consumer who was looking for a bigger place to live in, whether he really needed it or not. That was the trend for years. It, in fact, accelerated during the early years of this millennium when mortgages were inexpensive and easy to get. Life was good.
A responsible attitude toward the marketplace and how it truly functions were largely forgotten by many and it gradually germinated heavy overbuilding and increasing foreclosure rates and all that has brought us to today's stagnant residential real estate environment. New homes and resales alike are hard to sell and to get a mortgage nowadays requires actually a decent credit background.
The forces of the marketplace have clearly punished many builders and now they are adjusting. While desperately working to move unsold properties, most of which belong to the more expensive category, they are redrawing their floorplans. The size of the average home of the future will shrink as a result. And there will be fewer high-priced amenities. All these gyms and offices and industrial-sized kitchens and this room and that room and this option and that option will probably be tossed.
Builders now understand that the consumer at last appears to get it that he should only purchase something he can actually afford. Which is an encouraging sign. Besides that, the lending industry has been slapped a few times hard across the face and now administers much tougher standards before signing off on a home loan. In essence, a smaller home that costs less is what will sell tomorrow.
It's refreshing to watch the economics of the housing industry imposing its market magic on the various participants moving about in the playing field.
Photo by Isosceles